You have to know how much you can spend on a mortgage before even considering getting into any contract. To figure out how much you can pay monthly, write down what money you have coming in and take away what you spend each month. Ignore any rent or other payments that would stop once you own your own home, but add in anything new that you may have to pay, such as buildings insurance, water rates or additional travel costs from your new home. You can also use our mortgage calculators to work out how your mortgage payments will be affected by any changes in interest rates.

          It is widely recommended that you can borrow up to three and-a-half times the main earner’s income before tax, plus one times any second earner’s income, or alternatively two-and-a-half times their joint incomes (if this is larger). However do not borrow the maximum you can afford now. Allow some room in case interest rates rise in future. You be tempted to borrow as much as possible when the initial cost is manageable, but you could get into difficulties and lose your home if you can’t keep up your repayments.

          All lenders have the “lending” responsibly. Therefore lenders should estimate if, and give you advice how; you can keep up with the mortgage repayments now and in the future. Their considerations are based on criteria like your income, expenditure and other circumstances. But you should also review by yourself your borrowing capacity in advance in order to give you a better picture of your borrowing capabilities before any external advice.

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